BUSINESS ORGANIZATIONS CODE
CHAPTER 153. LIMITED PARTNERSHIPS
SUBCHAPTER A. GENERAL PROVISIONS
§ 153.001. DEFINITION. In this chapter, "other limited
partnership provisions" means the provisions of Title 1 and
Chapters 151 and 154, to the extent applicable to limited
partnerships.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.002. CONSTRUCTION. (a) This chapter and the
other limited partnership provisions shall be applied and construed
to effect its general purpose to make uniform the law with respect
to limited partnerships among states that have similar laws.
(b) The rule that a statute in derogation of the common law
is to be strictly construed does not apply to this chapter and the
other limited partnership provisions.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.003. APPLICABILITY OF OTHER LAWS. (a) Except as
provided by Subsection (b), in a case not provided for by this
chapter and the other limited partnership provisions, the
provisions of Chapter 152 governing partnerships that are not
limited partnerships and the rules of law and equity govern.
(b) The powers and duties of a limited partner shall not be
governed by a provision of Chapter 152 that would be inconsistent
with the nature and role of a limited partner as contemplated by
this chapter.
(c) A limited partner shall not have any obligation or duty
of a general partner solely by reason of being a limited partner.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.004. NONWAIVABLE TITLE 1 PROVISIONS. (a) Except
as provided by this section, the following provisions of Title 1 may
not be waived or modified in the partnership agreement of a limited
partnership:
(1) Chapter 1, if the provision is used to interpret a
provision or define a word or phrase contained in a section listed
in this subsection;
(2) Chapter 2, other than Section 2.104(c)(2),
2.104(c)(3), or 2.113;
(3) Chapter 3, other than Subchapters C and E of that
chapter and Section 3.151 (provided, that in all events a
partnership agreement may not validly waive or modify Sections
153.551 and 153.552); or
(4) Chapter 4, 5, 10, 11, or 12, other than Section
11.058.
(b) A provision listed in Subsection (a) may be waived or
modified in the partnership agreement if the provision that is
waived or modified authorizes the limited partnership to waive or
modify the provision in the limited partnership's governing
documents.
(c) A provision listed in Subsection (a) may be modified in
the partnership agreement if the provision that is modified
specifies:
(1) the person or group of persons who are entitled to
approve a modification; or
(2) the vote or other method by which a modification is
required to be approved.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.005. WAIVER OR MODIFICATION OF RIGHTS OF THIRD
PARTIES. A provision in this title or in that part of Title 1
applicable to a limited partnership that grants a right to a person,
other than a general partner, a limited partner, or assignee of a
partnership interest in a limited partnership, may be waived or
modified in the partnership agreement of the limited partnership
only if the person consents to the waiver or modification.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER B. SUPPLEMENTAL PROVISIONS REGARDING AMENDMENT TO
CERTIFICATE OF FORMATION
§ 153.051. REQUIRED AMENDMENT TO CERTIFICATE OF
FORMATION. (a) A general partner shall file a certificate of
amendment reflecting the occurrence of one or more of the following
events not later than the 30th day after the date on which the event
occurred:
(1) the admission of a new general partner;
(2) the withdrawal of a general partner;
(3) a change in the name of the limited partnership;
or
(4) except as provided by Section 5.202, a change in:
(A) the address of the registered office; or
(B) the name or address of the registered agent
of the limited partnership.
(b) A general partner who becomes aware that a statement in
a certificate of formation was false when made or that a matter
described in the certificate has changed, making the certificate
false in any material respect, shall promptly amend the certificate
to make it accurate.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.052. DISCRETIONARY AMENDMENT TO CERTIFICATE OF
FORMATION. (a) A certificate of formation may be amended at any
time for a proper purpose as determined by the general partners.
(b) A certificate of formation may be amended to state the
name, mailing address, and street address of the business or
residence of each person winding up the limited partnership's
affairs if, after an event requiring the winding up of a limited
partnership but before the limited partnership is reconstituted or
a certificate of cancellation is filed as provided by Section
153.451:
(1) the certificate of formation has been amended to
reflect the withdrawal of all general partners; or
(2) a person who is not shown on the certificate of
formation as a general partner is carrying out the winding up of a
limited partnership's affairs.
(c) If the certificate of formation is amended under
Subsection (b), each person winding up the limited partnership's
affairs shall execute and file the certificate of amendment. A
person winding up the partnership's affairs is not subject to
liability as a general partner because of the filing of the
certificate of amendment.
(d) A general partner who is not winding up the limited
partnership's affairs is not required to execute and file a
certificate of amendment as provided by this section.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER C. LIMITED PARTNERS
§ 153.101. ADMISSION OF LIMITED PARTNERS. (a) In
connection with the formation of a limited partnership, a person
acquiring a limited partnership interest becomes a limited partner
on the later of:
(1) the date on which the limited partnership is
formed; or
(2) the date stated in the records of the limited
partnership as the date on which the person becomes a limited
partner or, if that date is not stated in those records, the date on
which the person's admission is first reflected in the records of
the limited partnership.
(b) After a limited partnership is formed, a person who
acquires a partnership interest directly from the limited
partnership becomes a new limited partner on:
(1) compliance with the provisions of the partnership
agreement governing admission of new limited partners; or
(2) if the partnership agreement does not contain
relevant admission provisions, the written consent of all partners.
(c) After formation of a limited partnership, an assignee of
a partnership interest becomes a new limited partner as provided by
Section 153.253(a).
(d) A person may be a limited partner unless the person
lacks capacity apart from this chapter and the other limited
partnership provisions.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.102. LIABILITY TO THIRD PARTIES. (a) A limited
partner is not liable for the obligations of a limited partnership
unless:
(1) the limited partner is also a general partner; or
(2) in addition to the exercise of the limited
partner's rights and powers as a limited partner, the limited
partner participates in the control of the business.
(b) If the limited partner participates in the control of
the business, the limited partner is liable only to a person who
transacts business with the limited partnership reasonably
believing, based on the limited partner's conduct, that the limited
partner is a general partner.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.103. ACTIONS NOT CONSTITUTING PARTICIPATION IN
BUSINESS FOR LIABILITY PURPOSES. For purposes of this section and
Sections 153.102, 153.104, and 153.105, a limited partner does not
participate in the control of the business because the limited
partner has or has acted in one or more of the following capacities
or possesses or exercises one or more of the following powers:
(1) acting as:
(A) a contractor for or an agent or employee of
the limited partnership;
(B) a contractor for or an agent or employee of a
general partner;
(C) an officer, director, or stockholder of a
corporate general partner;
(D) a partner of a partnership that is a general
partner of the limited partnership; or
(E) a member or manager of a limited liability
company that is a general partner of the limited partnership;
(2) acting in a capacity similar to that described in
Subdivision (1) with any other person that is a general partner of
the limited partnership;
(3) consulting with or advising a general partner on
any matter, including the business of the limited partnership;
(4) acting as surety, guarantor, or endorser for the
limited partnership, guaranteeing or assuming one or more specific
obligations of the limited partnership, or providing collateral for
borrowings of the limited partnership;
(5) calling, requesting, attending, or participating
in a meeting of the partners or the limited partners;
(6) winding up the business of a limited partnership
under Chapter 11 and Subchapter K of this chapter;
(7) taking an action required or permitted by law to
bring, pursue, settle, or otherwise terminate a derivative action
in the right of the limited partnership;
(8) serving on a committee of the limited partnership
or the limited partners; or
(9) proposing, approving, or disapproving, by vote or
otherwise, one or more of the following matters:
(A) the dissolution or winding up of the limited
partnership;
(B) an election to reconstitute the limited
partnership or continue the business of the limited partnership;
(C) the sale, exchange, lease, mortgage,
assignment, pledge, or other transfer of, or granting of a security
interest in, an asset of the limited partnership;
(D) the incurring, renewal, refinancing, or
payment or other discharge of indebtedness by the limited
partnership;
(E) a change in the nature of the business of the
limited partnership;
(F) the admission, removal, or retention of a
general partner;
(G) the admission, removal, or retention of a
limited partner;
(H) a transaction or other matter involving an
actual or potential conflict of interest;
(I) an amendment to the partnership agreement or
certificate of formation;
(J) if the limited partnership is qualified as an
investment company under the federal Investment Company Act of 1940
(15 U.S.C. Section 80a-1 et seq.), as amended, any matter required
by that Act or the rules and regulations of the Securities and
Exchange Commission under that Act, to be approved by the holders of
beneficial interests in an investment company, including:
(i) electing directors or trustees of the
investment company;
(ii) approving or terminating an investment
advisory or underwriting contract;
(iii) approving an auditor; and
(iv) acting on another matter that that Act
requires to be approved by the holders of beneficial interests in
the investment company;
(K) indemnification of a general partner under
Chapter 8 or otherwise;
(L) any other matter stated in the partnership
agreement;
(M) the exercising of a right or power granted or
permitted to limited partners under this code and not specifically
enumerated in this section; or
(N) the merger or conversion of a limited
partnership.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.104. ENUMERATION OF ACTIONS NOT EXCLUSIVE. The
enumeration in Section 153.103 does not mean that a limited partner
who has acted or acts in another capacity or possesses or exercises
another power constitutes participation by that limited partner in
the control of the business of the limited partnership.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.105. CREATION OF RIGHTS. Sections 153.103 and
153.104 do not create rights of limited partners. Rights of limited
partners may be created only by:
(1) the certificate of formation;
(2) the partnership agreement;
(3) other sections of this chapter; or
(4) the other limited partnership provisions.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.106. ERRONEOUS BELIEF OF CONTRIBUTOR BEING LIMITED
PARTNER. Except as provided by Section 153.109, a person who
erroneously but in good faith believes that the person has made a
contribution to and has become a limited partner in a limited
partnership is not liable as a general partner or otherwise
obligated because of making or attempting to make the contribution,
receiving distributions from the partnership, or exercising the
rights of a limited partner if, within a reasonable time after
ascertaining the mistake, the person:
(1) causes an appropriate certificate of formation or
certificate of amendment to be signed and filed;
(2) files or causes to be filed with the secretary of
state a written statement in accordance with Section 153.107; or
(3) withdraws from participation in future profits of
the enterprise by executing and filing with the secretary of state a
certificate declaring the person's withdrawal under this section.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.107. STATEMENT REQUIRED FOR LIABILITY
PROTECTION. (a) A written statement filed under Section
153.106(2) must be entitled "Filing under Section 153.106(2),
Business Organizations Code," and contain:
(1) the name of the partnership;
(2) the name and mailing address of the person signing
the written statement; and
(3) a statement that:
(A) the person signing the written statement
acquired a limited partnership interest in the partnership;
(B) the person signing the written statement has
made an effort to cause a general partner of the partnership to file
an accurate certificate of formation required by the code and the
general partner has failed or refused to file the certificate; and
(C) the statement is being filed under Section
153.106(2) and the person signing the written statement is claiming
status as a limited partner of the partnership named in the
document.
(b) The statement is effective for 180 days.
(c) A statement filed under Section 153.106(2) may be signed
by more than one person claiming limited partnership status under
this section and Sections 153.106, 153.108, and 153.109.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.108. REQUIREMENTS FOR LIABILITY PROTECTION
FOLLOWING EXPIRATION OF STATEMENT. (a) If a certificate
described by Section 153.106(1) has not been filed before the
expiration of the 180-day period described by Section 153.107(b),
the person filing the statement has no further protection from
liability under Section 153.106(2) unless the person complies with
this section. To be protected under Section 153.106 the person
must, not later than the 10th day after the date of expiration of
the 180-day period:
(1) withdraw under Section 153.106(3); or
(2) bring an action under Section 153.554 to compel
the execution and filing of a certificate of formation or
amendment.
(b) If an action is brought within the applicable period and
is diligently prosecuted to conclusion, the person bringing the
action continues to be protected from liability under Section
153.106(2) until the action is finally decided adversely to that
person.
(c) This section and Sections 153.106, 153.107, and 153.109
do not protect a person from liability that arises under Sections
153.102-153.105.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.109. LIABILITY OF ERRONEOUS
CONTRIBUTOR. Regardless of whether Sections 153.106, 153.107, and
153.108 apply, a person who makes a contribution in the
circumstances described by Section 153.106 is liable as a general
partner to a third party who transacts business with the
partnership before an action taken under Section 153.106 if:
(1) the contributor has knowledge or notice that no
certificate has been filed or that the certificate inaccurately
referred to the contributor as a general partner; and
(2) the third party reasonably believed, based on the
contributor's conduct, that the contributor was a general partner
at the time of the transaction and extended credit to the
partnership in reasonable reliance on the credit of the
contributor.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.110. WITHDRAWAL OF LIMITED PARTNER. A limited
partner may withdraw from a limited partnership only at the time or
on the occurrence of an event specified in a written partnership
agreement. The withdrawal of the partner must be made in accordance
with that agreement.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.111. DISTRIBUTION ON WITHDRAWAL. Except as
otherwise provided by Section 153.210 or the partnership agreement,
on withdrawal a withdrawing limited partner is entitled to receive,
not later than a reasonable time after withdrawal, the fair value of
that limited partner's interest in the limited partnership as of
the date of withdrawal.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.112. RECEIPT OF WRONGFUL DISTRIBUTION. A limited
partner who receives a distribution that is not permitted under
Section 153.210 is not required to return the distribution unless
the limited partner knew that the distribution violated the
prohibition of Section 153.210. This section does not affect an
obligation of the limited partner under the partnership agreement
or other applicable law to return the distribution.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.113. POWERS OF ESTATE OF LIMITED PARTNER WHO IS
DECEASED OR INCAPACITATED. If a limited partner who is an
individual dies or a court adjudges the limited partner to be
incapacitated in managing the limited partner's person or property,
the limited partner's executor, administrator, guardian,
conservator, or other legal representative may exercise all of the
limited partner's rights and powers to settle the limited partner's
estate or administer the limited partner's property, including the
power of an assignee to become a limited partner under the
partnership agreement.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER D. GENERAL PARTNERS
§ 153.151. ADMISSION OF ADDITIONAL GENERAL
PARTNERS. (a) After a limited partnership is formed, additional
general partners may be admitted:
(1) in the manner provided by a written partnership
agreement; or
(2) if a written partnership agreement does not
provide for the admission of additional general partners, with the
written consent of all partners.
(b) A person may be a general partner unless the person
lacks capacity apart from this chapter.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.152. GENERAL POWERS AND LIABILITIES OF GENERAL
PARTNER. (a) Except as provided by this chapter, the other
limited partnership provisions, or a partnership agreement, a
general partner of a limited partnership:
(1) has the rights and powers and is subject to the
restrictions of a partner in a partnership without limited
partners; and
(2) has the liabilities of a partner in a partnership
without limited partners to the partnership and to the other
partners.
(b) Except as provided by this chapter or the other limited
partnership provisions, a general partner of a limited partnership
has the liabilities of a partner in a partnership without limited
partners to a person other than the partnership and the other
partners.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.153. POWERS AND LIABILITIES OF PERSON WHO IS BOTH
GENERAL PARTNER AND LIMITED PARTNER. A person who is both a
general partner and a limited partner:
(1) has the rights and powers and is subject to the
restrictions and liabilities of a general partner; and
(2) except as otherwise provided by the partnership
agreement, this chapter, or the other limited partnership
provisions, has the rights and powers and is subject to the
restrictions and liabilities, if any, of a limited partner to the
extent of the general partner's participation in the partnership as
a limited partner.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.154. CONTRIBUTIONS BY AND DISTRIBUTIONS TO GENERAL
PARTNER. A general partner of a limited partnership may make a
contribution to, be allocated profits and losses of, and receive a
distribution from the limited partnership as a general partner, a
limited partner, or both.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.155. WITHDRAWAL OF GENERAL PARTNER. (a) A
person ceases to be a general partner of a limited partnership on
the occurrence of one or more of the following events of withdrawal:
(1) the general partner withdraws as a general partner
from the limited partnership as provided by Subsection (b);
(2) the general partner ceases to be a general partner
of the limited partnership as provided by Section 153.252(b);
(3) the general partner is removed as a general
partner in accordance with the partnership agreement;
(4) unless otherwise provided by a written partnership
agreement, or with the written consent of all partners, the general
partner:
(A) makes a general assignment for the benefit of
creditors;
(B) files a voluntary bankruptcy petition;
(C) becomes the subject of an order for relief or
is declared insolvent in a federal or state bankruptcy or
insolvency proceeding;
(D) files a petition or answer seeking for the
general partner a reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under
law;
(E) files a pleading admitting or failing to
contest the material allegations of a petition filed against the
general partner in a proceeding of the type described by Paragraphs
(A)-(D); or
(F) seeks, consents to, or acquiesces in the
appointment of a trustee, receiver, or liquidator of the general
partner or of all or a substantial part of the general partner's
properties;
(5) unless otherwise provided by a written partnership
agreement or with the written consent of all partners, the
expiration of:
(A) 120 days after the date of the commencement
of a proceeding against the general partner seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution,
or similar relief under law if the proceeding has not been
previously dismissed;
(B) 90 days after the date of the appointment,
without the general partner's consent, of a trustee, receiver, or
liquidator of the general partner or of all or a substantial part of
the general partner's properties if the appointment has not
previously been vacated or stayed; or
(C) 90 days after the date of expiration of a
stay, if the appointment has not previously been vacated;
(6) the death of a general partner;
(7) a court adjudicating a general partner who is an
individual mentally incompetent to manage the general partner's
person or property;
(8) unless otherwise provided by a written partnership
agreement or with the written consent of all partners, the
commencement of winding up activities intended to conclude in the
termination of a trust that is a general partner, but not merely the
substitution of a new trustee;
(9) unless otherwise provided by a written partnership
agreement or with the written consent of all partners, the
commencement of winding up activities of a separate partnership
that is a general partner;
(10) unless otherwise provided by a written
partnership agreement or with the written consent of all partners,
the:
(A) filing of a certificate of termination or its
equivalent for an entity, other than a nonfiling entity or a foreign
nonfiling entity, that is a general partner; or
(B) termination or revocation of the certificate
of formation or its equivalent of an entity, other than a nonfiling
entity or a foreign nonfiling entity, that is a general partner and
the expiration of 90 days after the date of notice to the entity of
termination or revocation without a reinstatement of its
certificate of formation or its equivalent; or
(11) the distribution by the fiduciary of an estate
that is a general partner of the estate's entire interest in the
limited partnership.
(b) A general partner may withdraw at any time from a
limited partnership and cease to be a general partner under
Subsection (a) by giving written notice to the other partners.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.156. NOTICE OF EVENT OF WITHDRAWAL. A general
partner who is subject to an event that with the passage of the
specified period becomes an event of withdrawal under Section
153.155(a)(4) or (5) shall notify the other partners of the event
not later than the 30th day after the date on which the event
occurred.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.157. WITHDRAWAL OF GENERAL PARTNER IN VIOLATION OF
PARTNERSHIP AGREEMENT. Unless otherwise provided by the
partnership agreement, a withdrawal by a general partner of a
partnership for a definite term or particular undertaking before
the expiration of that term or completion of that undertaking is a
breach of the partnership agreement.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.158. EFFECT OF WITHDRAWAL. (a) Unless otherwise
provided by a written partnership agreement and subject to the
liability created under Section 153.162, if a general partner
ceases to be a general partner under Section 153.155, the remaining
general partner or partners, or, if there are no remaining general
partners, a majority-in-interest of the limited partners in a vote
that excludes any limited partnership interest held by the
withdrawing general partner, may:
(1) convert that general partner's partnership
interest to that of a limited partner; or
(2) pay to the withdrawn general partner in cash, or
secure by bond approved by a court of competent jurisdiction, the
value of that partner's partnership interest minus the damages
caused if the withdrawal constituted a breach of the partnership
agreement.
(b) Until an action described by Subsection (a) is taken,
the owner of the partnership interest of the withdrawn general
partner has the status of an assignee under Subchapter F, Section
153.113, and Section 153.555.
(c) If there are no remaining general partners following the
withdrawal of a general partner, the partnership may be
reconstituted.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.159. CONVERSION OF PARTNERSHIP INTEREST AFTER
WITHDRAWAL. If the partners convert the partnership interest
under Section 153.158(a)(1), the limited partnership interest may
be reduced pro rata with all other partners to provide
compensation, an interest in the partnership, or both, to a
replacement general partner.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.160. EFFECT OF CONVERSION OF PARTNERSHIP
INTEREST. (a) After an amendment to the certificate of formation
reflecting the general partner's withdrawal as a general partner is
filed under Section 153.051, the withdrawing general partner:
(1) may vote as a limited partner in all matters, to
the same extent as the members of the class of limited partners
having the least voting rights with respect to the matter on which
the vote is taken; and
(2) may not vote on the admission and compensation of a
general partner who replaces the withdrawing general partner.
(b) If the general partner's withdrawal violates the
partnership agreement, the general partner does not have voting
rights.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.161. LIABILITY OF GENERAL PARTNER FOR DEBT
INCURRED AFTER EVENT OF WITHDRAWAL. (a) Unless otherwise
provided by a written partnership agreement and subject to the
liability created under Section 153.162, a general partner who
ceases to be a general partner under Section 153.155 is not
personally liable in the partner's capacity as a general partner
for partnership debt incurred after that partner ceases to be a
general partner unless the applicable creditor at the time the debt
was incurred reasonably believed that the partner remained a
general partner.
(b) A creditor of the partnership has reason to believe that
a partner remains a general partner if:
(1) the creditor had no knowledge or notice of the
general partner's withdrawal and:
(A) was a creditor of the partnership at the time
of the general partner's withdrawal; or
(B) had extended credit to the partnership within
two years before the date of withdrawal; or
(2) the creditor had known that the partner was a
general partner in the partnership before the general partner's
withdrawal and had no knowledge or notice of the withdrawal and the
general partner's withdrawal had not been advertised in a newspaper
of general circulation in each place at which the partnership
business was regularly conducted.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.162. LIABILITY FOR WRONGFUL WITHDRAWAL. (a) If
a general partner's withdrawal from a limited partnership violates
the partnership agreement, the partnership may recover damages from
the withdrawing general partner for breach of the partnership
agreement, including the reasonable cost of obtaining replacement
of the services the withdrawn partner was obligated to perform.
(b) In addition to pursuing any remedy available under
applicable law, the partnership may effect the recovery of damages
under Subsection (a) by offsetting those damages against the amount
otherwise distributable to the withdrawing general partner,
reducing the limited partner interest into which the withdrawing
general partner's interest may be converted under Section
153.158(a)(1), or both.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER E. FINANCES
§ 153.201. FORM OF CONTRIBUTION. The contribution of a
limited partner may consist of a tangible or intangible benefit to
the limited partnership or other property of any kind or nature,
including:
(1) cash;
(2) a promissory note;
(3) services performed;
(4) a contract for services to be performed; and
(5) another interest in or security of the limited
partnership, another domestic or foreign limited partnership, or
other entity.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.202. ENFORCEABILITY OF PROMISE TO MAKE
CONTRIBUTION. (a) A promise by a limited partner to make a
contribution to, or pay cash or transfer other property to, a
limited partnership is not enforceable unless the promise is in
writing and signed by the limited partner.
(b) Except as otherwise provided by the partnership
agreement, a partner or the partner's legal representative or
successor is obligated to the limited partnership to perform an
enforceable promise to make a contribution to or pay cash or
transfer other property to a limited partnership, notwithstanding
the partner's death, disability, or other change in circumstances.
(c) If a partner or a partner's legal representative or
successor does not make a contribution or other payment of cash or
transfer of other property required by the enforceable promise,
whether as a contribution or with respect to a contribution
previously made, that partner or the partner's legal representative
or successor is obligated, at the option of the limited
partnership, to pay to the partnership an amount of cash equal to
the portion of the agreed value, as stated in the partnership
agreement or in the partnership records required to be kept under
Sections 153.551 and 153.552, of the contribution represented by
the amount of cash that has not been paid or the value of the
property that has not been transferred.
(d) A partnership agreement may provide that the
partnership interest of a partner who fails to make a payment of
cash or transfer of other property to the partnership, whether as a
contribution or with respect to a contribution previously made,
required by an enforceable promise is subject to specified
consequences, which may include:
(1) a reduction of the defaulting partner's percentage
or other interest in the limited partnership;
(2) subordination of the partner's partnership
interest to the interest of nondefaulting partners;
(3) a forced sale of the partner's partnership
interest;
(4) forfeiture of the partner's partnership interest;
(5) the lending of money to the defaulting partner by
other partners of the amount necessary to meet the defaulting
partner's commitment;
(6) a determination of the value of the defaulting
partner's partnership interest by appraisal or by formula and
redemption or sale of the partnership interest at that value; or
(7) another penalty or consequence.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.203. RELEASE OF OBLIGATION TO
PARTNERSHIP. Unless otherwise provided by the partnership
agreement, the obligation of a partner or the legal representative
or successor of a partner to make a contribution, pay cash, transfer
other property, or return cash or property paid or distributed to
the partner in violation of this chapter or the partnership
agreement may be compromised or released only by consent of all of
the partners.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.204. ENFORCEABILITY OF
OBLIGATION. (a) Notwithstanding a compromise or release under
Section 153.203, a creditor of a limited partnership who extends
credit or otherwise acts in reasonable reliance on an obligation
described by Section 153.203 may enforce the original obligation
if:
(1) the obligation is reflected in a document signed
by the partner; and
(2) the document is not amended or canceled to reflect
the compromise or release.
(b) Notwithstanding the compromise or release, a general
partner remains liable to persons other than the partnership and
the other partners, as provided by Sections 153.152(a)(2) and (b).
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.205. REQUIREMENTS TO ENFORCE CONDITIONAL
OBLIGATION. (a) An obligation of a limited partner of a limited
partnership that is subject to a condition may be enforced by the
partnership creditor described by Section 153.204 only if the
condition is satisfied or waived by or with respect to the limited
partner.
(b) A conditional obligation of a limited partner of a
limited partnership includes a contribution payable on a
discretionary call of the limited partnership before the time the
call occurs.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.206. ALLOCATION OF PROFITS AND LOSSES. (a) The
profits and losses of a limited partnership shall be allocated
among the partners in the manner provided by a written partnership
agreement.
(b) If a written partnership agreement does not provide for
the allocation of profits and losses, the profits and losses shall
be allocated:
(1) in accordance with the current percentage or other
interest in the partnership stated in partnership records of the
kind described by Section 153.551(a); or
(2) if the allocation of profits and losses is not
provided for in partnership records of the kind described by
Section 153.551(a), in proportion to capital accounts.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.207. RIGHT TO DISTRIBUTION. Subject to Section
153.210, when a partner becomes entitled to receive a distribution,
the partner has with respect to the distribution the status of and
is entitled to all remedies available to a creditor of the limited
partnership.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.208. SHARING OF DISTRIBUTIONS. (a) A
distribution of cash or another asset of a limited partnership
shall be made to a partner in the manner provided by a written
partnership agreement.
(b) If a written partnership agreement does not provide
otherwise, a distribution that is a return of capital shall be made
on the basis of the agreed value, as stated in the partnership
records required to be maintained under Section 153.551(a), of the
contribution made by each partner to the extent that the
contribution has not been returned. A distribution that is not a
return of capital shall be made in proportion to the allocation of
profits as determined under Section 153.206.
(c) Unless otherwise defined by a written partnership
agreement, in this section, "return of capital" means a
distribution to a partner to the extent that the partner's capital
account, immediately after the distribution, is less than the
amount of that partner's contribution to the partnership as reduced
by a prior distribution that was a return of capital.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.209. INTERIM DISTRIBUTIONS. Except as otherwise
provided by this section and Section 153.210, a partner is entitled
to receive a distribution from a limited partnership to the extent
and at the time or on the occurrence of an event specified in the
partnership agreement before:
(1) the partner withdraws from the partnership; and
(2) the winding up of the partnership business.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.210. LIMITATION ON DISTRIBUTION. A limited
partnership may not make a distribution to a partner if,
immediately after giving effect to the distribution and despite any
compromise of a claim referred to by Sections 153.203 and 153.204,
all liabilities of the limited partnership, other than liabilities
to partners with respect to their partnership interests and
liabilities for which the recourse of creditors is limited to
specified property of the limited partnership, exceed the fair
value of the partnership assets. The fair value of property that is
subject to a liability for which recourse of creditors is limited
shall be included in the partnership assets for purposes of this
subsection only to the extent that the fair value of that property
exceeds that liability.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER F. PARTNERSHIP INTEREST
§ 153.251. ASSIGNMENT OF PARTNERSHIP
INTEREST. (a) Except as otherwise provided by the partnership
agreement, a partnership interest is assignable wholly or partly.
(b) Except as otherwise provided by the partnership
agreement, an assignment of a partnership interest:
(1) does not dissolve a limited partnership;
(2) does not entitle the assignee to become, or to
exercise rights or powers of, a partner; and
(3) entitles the assignee to be allocated income,
gain, loss, deduction, credit, or similar items and to receive
distributions to which the assignor was entitled to the extent
those items are assigned.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.252. RIGHTS OF ASSIGNOR. (a) Except as
otherwise provided by the partnership agreement, until the assignee
becomes a partner, the assignor partner continues to be a partner in
the limited partnership. The assignor partner may exercise any
rights or powers of a partner, except to the extent those rights or
powers are assigned.
(b) Except as otherwise provided by the partnership
agreement, on the assignment by a general partner of all of the
general partner's rights as a general partner, the general
partner's status as a general partner may be terminated by the
affirmative vote of a majority-in-interest of the limited partners.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.253. RIGHTS OF ASSIGNEE. (a) An assignee of a
partnership interest, including the partnership interest of a
general partner, may become a limited partner if and to the extent
that:
(1) the partnership agreement provides; or
(2) all partners consent.
(b) An assignee who becomes a limited partner, to the extent
of the rights and powers assigned, has the rights and powers and is
subject to the restrictions and liabilities of a limited partner
under a partnership agreement and this code.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.254. LIABILITY OF ASSIGNEE. (a) Until an
assignee of the partnership interest in a limited partnership
becomes a partner, the assignee does not have liability as a partner
solely as a result of the assignment.
(b) Unless otherwise provided by a written partnership
agreement, an assignee who becomes a limited partner:
(1) is liable for the obligations of the assignor to
make contributions as provided by Sections 153.202-153.204;
(2) is not obligated for liabilities unknown to the
assignee at the time the assignee became a limited partner and that
could not be ascertained from a written partnership agreement; and
(3) is not liable for the obligations of the assignor
under Sections 153. 105, 153.112, and 153.162.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.255. LIABILITY OF ASSIGNOR. Regardless of
whether an assignee of a partnership interest becomes a limited
partner, the assignor is not released from the assignor's liability
to the limited partnership under Subchapter E and Sections 153.105,
153.112, and 153.162.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.256. CHARGE IN PAYMENT OF JUDGMENT
CREDITOR. (a) On application to a court by a judgment creditor of
a partner or other owner of a partnership interest, the court may:
(1) charge the partnership interest of the partner or
other owner with payment of the unsatisfied amount of the judgment,
with interest;
(2) appoint a receiver for the debtor partner's share
of the partnership's profits and other money payable or that
becomes payable to the debtor partner with respect to the limited
partnership; and
(3) make other orders, directions, and inquiries that
the circumstances of the case require.
(b) To the extent that the partnership interest is charged
in the manner provided by Subsection (a), the judgment creditor has
only the rights of an assignee of the partnership interest.
(c) The partnership interest charged may be:
(1) redeemed at any time before foreclosure; or
(2) in case of a sale directed by the court, and
without constituting an event requiring winding up, purchased:
(A) by one or more of the general partners with
separate property of any general partner; or
(B) with respect to partnership property, by one
or more of the general partners whose interests are not charged, on
the consent of all general partners whose interests are not charged
and a majority in interest of the limited partners, excluding
limited partnership interests held by a general partner whose
interest is charged.
(d) The remedies provided by Subsection (a) are exclusive of
other remedies that may exist, including remedies under laws of
this state applicable to partnerships without limited partners.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.257. EXEMPTION LAWS APPLICABLE TO PARTNERSHIP
INTEREST NOT AFFECTED. Section 153.256 does not deprive a partner
of the benefit of an exemption law applicable to that partner's
partnership interest.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER G. REPORTS
§ 153.301. PERIODIC REPORT. The secretary of state may
require a domestic limited partnership or a foreign limited
partnership registered to transact business in this state to file a
report not more than once every four years as required by this
subchapter.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.302. FORM AND CONTENTS OF REPORT. (a) The report
must:
(1) include:
(A) the name of the limited partnership;
(B) the state or territory under the laws of
which the limited partnership is formed;
(C) the address of the registered office of the
limited partnership in this state and the name of the registered
agent at that address;
(D) the address of the principal office in the
United States where records are to be kept or made available under
Sections 153.551 and 153.552; and
(E) the name, mailing address, and street address
of the business or residence of each general partner;
(2) be made on a form adopted by the secretary of state
for that purpose; and
(3) be signed on behalf of the limited partnership by
at least one general partner.
(b) The information contained in the report must be given as
of the date of the execution of the report.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.303. FILING FEE. The filing fee for the report is
as provided by Chapter 4.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.304. DELIVERY OF REPORT. The report must be
delivered to the secretary of state not later than the 30th day
after the date on which notice is mailed under Section 153.305.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.305. ACTION BY SECRETARY OF STATE. (a) The
secretary of state shall send a notice that the report required by
Section 153.301 is due.
(b) The notice must be:
(1) addressed to the limited partnership; and
(2) mailed to:
(A) the registered office of the limited
partnership;
(B) the last known address of the limited
partnership as it appears on record in the office of the secretary
of state; or
(C) any other known place of business of the
limited partnership.
(c) The secretary of state shall include with the notice a
copy of a report form to be prepared and filed as provided by this
subchapter.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.306. EFFECT OF FILING REPORT. (a) If the
secretary of state finds that the report complies with this
subchapter, the secretary shall:
(1) accept the report for filing;
(2) acknowledge to the limited partnership the filing
of the report; and
(3) update the records of the secretary of state's
office to reflect:
(A) a reported change in the address of the
registered office or principal office, or in the business or
residence address of a general partner; and
(B) a reported change in the name of the
registered agent.
(b) The filing of a report under Section 153.301 does not
relieve the limited partnership of the requirement to file an
amendment to the certificate of formation required under Section
153.051 or 153.052, except that the limited partnership is not
required to file an amendment to change the information specified
in Subsection (a)(3).
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.307. EFFECT OF FAILURE TO FILE REPORT. (a) A
domestic or foreign limited partnership that fails to file a report
under Section 153.301 when the report is due forfeits the limited
partnership's right to transact business in this state. A
forfeiture under this section takes effect without judicial
ascertainment.
(b) When the right to transact business has been forfeited
under this section, the secretary of state shall note that the right
to transact business has been forfeited and the date of forfeiture
on the record kept in the secretary's office relating to the limited
partnership.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.308. NOTICE OF FORFEITURE OF RIGHT TO TRANSACT
BUSINESS. Notice of the forfeiture under Section 153.307 shall be
mailed to the limited partnership at:
(1) the registered office of the limited partnership;
(2) the last known address of the limited partnership;
or
(3) any other place of business of the limited
partnership.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.309. EFFECT OF FORFEITURE OF RIGHT TO TRANSACT
BUSINESS. (a) Unless the right of the limited partnership to
transact business is revived in accordance with Section 153.310:
(1) the limited partnership may not maintain an
action, suit, or proceeding in a court of this state; and
(2) a successor or assignee of the limited partnership
may not maintain an action, suit, or proceeding in a court of this
state on a right, claim, or demand arising from the transaction of
business by the limited partnership in this state.
(b) The forfeiture of the right to transact business in this
state does not:
(1) impair the validity of a contract or act of the
limited partnership; or
(2) prevent the limited partnership from defending an
action, suit, or proceeding in a court of this state.
(c) This section and Sections 153.307 and 153.308 do not
affect the liability of a limited partner to the limited
partnership.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.310. REVIVAL OF RIGHT TO TRANSACT
BUSINESS. (a) A limited partnership that forfeits the right to
transact business in this state as provided by Section 153.309 may
be relieved from the forfeiture by filing the required report not
later than the 120th day after the date of mailing of the notice of
forfeiture under Section 153.308, accompanied by the filing fees as
provided by Chapter 4.
(b) If a limited partnership complies with Subsection (a),
the secretary of state shall:
(1) revive the right of the limited partnership to
transact business in this state;
(2) cancel the note regarding the forfeiture; and
(3) note the revival and the date of revival on the
record kept in the secretary's office relating to the limited
partnership.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.311. CANCELLATION OF CERTIFICATE OR REGISTRATION
AFTER FORFEITURE. (a) The secretary of state may cancel the
certificate of formation of a domestic limited partnership, or the
registration of a foreign limited partnership, if the limited
partnership:
(1) forfeits its right to transact business in this
state under Section 153.307; and
(2) fails to revive that right under Section 153.310.
(b) Cancellation of the certificate or registration takes
effect without judicial ascertainment.
(c) The secretary of state shall note the cancellation and
the date of cancellation on the record kept in the secretary's
office relating to the limited partnership.
(d) On cancellation, the status of the limited partnership
is changed to inactive according to the records of the secretary of
state. The change to inactive status does not affect the liability
of a limited partner to the limited partnership.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.312. REINSTATEMENT OF CERTIFICATE OF FORMATION OR
REGISTRATION. (a) A limited partnership the certificate of
formation or registration of which has been canceled as provided by
Section 153.311 may be relieved of the cancellation by filing the
report required by Section 153.301, accompanied by the filing fees
provided by Chapter 4.
(b) If the limited partnership pays the fees required by
Subsection (a), the secretary of state shall:
(1) reinstate the certificate or registration of the
limited partnership without judicial ascertainment;
(2) change the status of the limited partnership to
active; and
(3) note the reinstatement on the record kept in the
secretary's office relating to the limited partnership.
(c) If the name of the limited partnership is not available
at the time of reinstatement, the secretary of state shall require
the limited partnership as a precondition to reinstatement to:
(1) file an amendment to the partnership's certificate
of formation; or
(2) in the case of a foreign limited partnership,
amend its application for registration to adopt an assumed name for
use in this state.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER H. LIMITED PARTNERSHIP AS LIMITED LIABILITY PARTNERSHIP
§ 153.351. REQUIREMENTS. A limited partnership is a
limited liability partnership and a limited partnership if the
partnership:
(1) registers as a limited liability partnership:
(A) as permitted by its partnership agreement;
or
(B) if its partnership agreement does not include
a provision for becoming a limited liability partnership, with the
consent of partners required to amend its partnership agreement;
(2) complies with Subchapter J, Chapter 152; and
(3) complies with Chapter 5.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.352. APPLICABILITY OF OTHER REQUIREMENTS. For
purposes of applying Section 152.802 to a limited partnership:
(1) an application to become a limited liability
partnership or to withdraw a registration must be signed by at least
one general partner; and
(2) other references to a partner mean a general
partner only.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.353. LAW APPLICABLE TO PARTNERS. If a limited
partnership is a limited liability partnership, Section 152.801
applies to a general partner and to a limited partner who is liable
under other provisions of this chapter for the debts or obligations
of the limited partnership.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER I. DERIVATIVE ACTIONS
§ 153.401. RIGHT TO BRING ACTION. A limited partner may
bring an action in a court on behalf of the limited partnership to
recover a judgment in the limited partnership's favor if:
(1) all general partners with authority to bring the
action have refused to bring the action; or
(2) an effort to cause those general partners to bring
the action is not likely to succeed.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.402. PROPER PLAINTIFF. In a derivative action,
the plaintiff must be a limited partner when the action is brought
and:
(1) the person must have been a limited partner at the
time of the transaction that is the subject of the action; or
(2) the person's status as a limited partner must have
arisen by operation of law or under the terms of the partnership
agreement from a person who was a limited partner at the time of the
transaction.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.403. PLEADING. In a derivative action, the
complaint must contain with particularity:
(1) the effort, if any, of the plaintiff to secure
initiation of the action by a general partner; or
(2) the reasons for not making the effort.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.404. SECURITY FOR EXPENSES OF
DEFENDANTS. (a) In a derivative action, the court may require the
plaintiff to give security for the reasonable expenses incurred or
expected to be incurred by a defendant in the action, including
reasonable attorney's fees.
(b) The court may increase or decrease at any time the
amount of the security on a showing that the security provided is
inadequate or excessive.
(c) If a plaintiff is unable to give security, the plaintiff
may file an affidavit in accordance with the Texas Rules of Civil
Procedure.
(d) Except as provided by Subsection (c), if a plaintiff
fails to give the security within a reasonable time set by the
court, the court shall dismiss the suit without prejudice.
(e) The court, on final judgment for a defendant and on a
finding that suit was brought without reasonable cause against the
defendant, may require the plaintiff to pay reasonable expenses,
including reasonable attorney's fees, to the defendant, regardless
of whether security has been required.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.405. EXPENSES OF PLAINTIFF. If a derivative
action is successful, wholly or partly, or if anything is received
by the plaintiff because of a judgment, compromise, or settlement
of the action or claim constituting a part of the action, the court
may award the plaintiff reasonable expenses, including reasonable
attorney's fees, and shall direct the plaintiff to remit to a party
identified by the court the remainder of the proceeds received by
the plaintiff.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER J. CANCELLATION OF CERTIFICATE OF FORMATION
§ 153.451. CERTIFICATE OF CANCELLATION. (a) A
certificate of formation shall be canceled by filing a certificate
of cancellation with the secretary of state in accordance with
Chapter 4:
(1) on the completion of the winding up of the
partnership business;
(2) when there are no limited partners; or
(3) subject to Subsection (b), on a merger or
conversion as provided by Chapter 10.
(b) If a limited partnership formed under this code is not
one of the surviving or resulting domestic limited partnerships or
other entities in a merger or conversion, the certificate of merger
or conversion filed under Chapter 10 is sufficient, without a
filing under this section, to cancel the certificate of formation
of the nonsurviving limited partnership.
(c) To approve a reinstatement of a limited partnership
under Section 11.202, all of the remaining partners, or another
group or percentage of partners as specified by the partnership
agreement, must agree in writing to reinstate and continue the
business of the limited partnership.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.452. CONTENTS OF CERTIFICATE OF CANCELLATION. A
certificate of cancellation must contain:
(1) the name of the limited partnership;
(2) the date of the filing of the partnership's
certificate of formation;
(3) the reason for filing the certificate of
cancellation;
(4) the future effective date or a certain time of
cancellation if cancellation is not effective on the filing of the
certificate; and
(5) other proper information as determined by the
person filing the certificate of cancellation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER K. SUPPLEMENTAL WINDING UP AND TERMINATION PROVISIONS
§ 153.501. CONTINUATION WITHOUT WINDING UP. (a) The
limited partnership may cancel an event requiring winding up as
specified in Section 11.051(1) or (3) if, not later than the 90th
day after the event, all remaining partners, or another group or
percentage of partners as specified by the partnership agreement,
agree in writing to continue the business of the limited
partnership.
(b) The limited partnership may revoke an event requiring
winding up as specified in Section 11.058(2) if:
(1) there remains at least one general partner and the
partnership agreement permits the business of the limited
partnership to be carried on by the remaining general partners and
those remaining general partners carry on the business; or
(2) not later than one year after the event, all
remaining partners, or another group or percentage of partners
specified in the partnership agreement:
(A) agree in writing to continue the business of
the limited partnership in writing; and
(B) to the extent that they desire or if there are
no remaining general partners, agree to the appointment of one or
more new general partners.
(c) The appointment of one or more new general partners
under Subsection (b)(2)(B) is effective from the date of
withdrawal.
(d) To approve a revocation under Section 11.151 by a
limited partnership of a voluntary decision to wind up as specified
in Section 11.058(1), prior to filing the certificate of
cancellation required by Section 153.451, all remaining partners,
or another group or percentage of partners as specified by the
partnership agreement, must agree in writing to revoke the
voluntary decision to wind up and continue the business of the
limited partnership.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.502. WINDING UP PROCEDURES. (a) Except as
provided by the partnership agreement, the winding up of the
partnership's affairs shall be accomplished by:
(1) the general partners;
(2) if there are no general partners, the limited
partners or a person chosen by the limited partners; or
(3) a person appointed by the court to carry out the
winding up under Subsection (b).
(b) On application of a partner or a partner's legal
representative or transferee, a court, on cause shown, may wind up
the limited partnership's affairs and, in connection with the
winding up, may appoint a person to carry out the liquidation and
may make all other orders, directions, and inquiries that the
circumstances require.
(c) Section 11.052(a)(2) shall not be applicable to a
limited partnership.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.503. POWERS OF PERSON CONDUCTING WIND
UP. (a) After an event requiring the winding up of a limited
partnership and until the filing of a certificate of cancellation
as provided by Sections 153.451 and 153.452, unless a written
partnership agreement provides otherwise, a person winding up the
limited partnership's business in the name of and on behalf of the
limited partnership may take the actions specified in Sections
11.052 and 11.053.
(b) The acts described by Subsection (a) do not create a
liability for a limited partner that did not exist before an action
to wind up the business of the partnership was taken.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.504. DISPOSITION OF ASSETS. On the winding up of
a limited partnership, its assets shall be paid or transferred as
follows:
(1) to the extent otherwise permitted by law, to
creditors, including partners who are creditors other than solely
because of the application of Section 153.207 for the payment or the
making of reasonable provision for payment to satisfy the
liabilities of the limited partnership;
(2) unless otherwise provided by the partnership
agreement, to partners and former partners to satisfy the
partnership's liability for distributions under Section 153.111 or
153.209; and
(3) unless otherwise provided by the partnership
agreement, to partners first for the return of their capital and
second with respect to their partnership interests, in the
proportions provided by Sections 153.208(a) and (b).
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER L. MISCELLANEOUS PROVISIONS
§ 153.551. RECORDS. (a) A domestic limited
partnership shall maintain the following records in its principal
office in the United States or make the records available in that
office not later than the fifth day after the date on which a
written request under Section 153.552(a) is received:
(1) a current list that states:
(A) the name and mailing address of each partner,
separately identifying in alphabetical order the general partners
and the limited partners;
(B) the last known street address of the business
or residence of each general partner;
(C) the percentage or other interest in the
partnership owned by each partner; and
(D) if one or more classes or groups are
established under the partnership agreement, the names of the
partners who are members of each specified class or group;
(2) a copy of:
(A) the limited partnership's federal, state,
and local information or income tax returns for each of the
partnership's six most recent tax years;
(B) the partnership agreement and certificate of
formation; and
(C) all amendments or restatements;
(3) copies of any document that creates, in the manner
provided by the partnership agreement, classes or groups of
partners;
(4) an executed copy of any powers of attorney under
which the partnership agreement, certificate of formation, and all
amendments or restatements to the agreement and certificate have
been executed;
(5) unless contained in the written partnership
agreement, a written statement of:
(A) the amount of the cash contribution and a
description and statement of the agreed value of any other
contribution made by each partner;
(B) the amount of the cash contribution and a
description and statement of the agreed value of any other
contribution that the partner has agreed to make in the future as an
additional contribution;
(C) the date on which additional contributions
are to be made or the date of events requiring additional
contributions to be made;
(D) events requiring the limited partnership to
be dissolved and its affairs wound up; and
(E) the date on which each partner in the limited
partnership became a partner; and
(6) books and records of the accounts of the limited
partnership.
(b) A limited partnership shall maintain its records in
written form or in another form capable of being converted to
written form in a reasonable time.
(c) A limited partnership shall keep in its registered
office in this state and make available to a partner on reasonable
request the street address of its principal office in the United
States in which the records required by this section are
maintained.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.552. EXAMINATION OF RECORDS AND
INFORMATION. (a) On written request stating a proper purpose, a
partner or an assignee of a partnership interest may examine and
copy, in person or through a representative, records required to be
kept under Section 153.551 and other information regarding the
business, affairs, and financial condition of the limited
partnership as is just and reasonable for the person to examine and
copy.
(b) The records requested under Subsection (a) may be
examined and copied at a reasonable time and at the partner's sole
expense.
(c) On written request by a partner or an assignee of a
partnership interest, the partnership shall provide to the
requesting partner or assignee without charge copies of:
(1) the partnership agreement and certificate of
formation and all amendments or restatements; and
(2) any tax return described by Section 153.551(a)(2).
(d) A request made under Subsection (c) must be made to:
(1) the person who is designated to receive the
request in the partnership agreement at the address designated in
the partnership agreement; or
(2) if there is no designation, a general partner at
the partnership's principal office in the United States.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.553. EXECUTION OF CERTAIN FILINGS. (a) Each
certificate required by this code to be filed by a limited
partnership with the secretary of state shall be executed as
follows:
(1) an initial certificate of formation must be signed
as provided in Section 3.004(b)(1), except for an initial
certificate of formation signed by a person under Section
153.106(1);
(2) a certificate of amendment or restated certificate
of formation must be signed by at least one general partner and by
each other general partner designated in the certificate of
amendment as a new general partner, unless signed and filed by a
person under Section 153.052(b), 153.052(c), or 153.106(1), but the
certificate of amendment need not be signed by a withdrawing
general partner;
(3) a certificate of cancellation must be signed by
all general partners participating in the winding up of the limited
partnership's business or, if no general partners are winding up
the limited partnership's business, by all nonpartner liquidators
or, if the limited partners are winding up the limited
partnership's business, by a majority-in-interest of the limited
partners;
(4) a certificate of merger filed on behalf of a
domestic limited partnership must be signed as provided by Chapter
10;
(5) a certificate filed under Section 10.251 must be
signed by the person designated by the court; and
(6) a certificate of correction must be signed by at
least one general partner.
(b) Any person may sign a certificate or partnership
agreement or amendment or restated certificate by an attorney in
fact. A power of attorney relating to the signing of a certificate
or partnership agreement or amendment or restated certificate by an
attorney in fact:
(1) is not required to be sworn to, verified, or
acknowledged;
(2) is not required to be filed with the secretary of
state; and
(3) shall be retained with the partnership records
under Sections 153.551 and 153.552.
(c) The execution of a certificate by a general partner or
the execution of a written statement by a person under Section
153.106(2) is an oath or affirmation, under a penalty of perjury,
that, to the best of the executing party's knowledge and belief, the
facts stated in the certificate or statement are true.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.554. EXECUTION, AMENDMENT, OR CANCELLATION BY
JUDICIAL ORDER. (a) If a person fails or refuses to execute or
file a certificate as required by this chapter or Title 1 or to
execute a partnership agreement, another person adversely affected
by the failure or refusal may petition a court to direct the
execution or filing of the certificate or the execution of the
partnership agreement, as appropriate.
(b) If the court finds that the execution or filing of the
certificate is proper and that a person required to execute or file
the certificate has failed or refused to execute or file the
certificate, the court shall order the secretary of state to record
an appropriate certificate.
(c) The judicial remedy described by Subsection (b) is not a
limit on the rights of a person to file a written statement under
Section 153.106(2).
(d) If the court finds that the partnership agreement should
be executed and that a person required to execute the partnership
agreement has failed or refused to execute the agreement, the court
shall enter an order granting appropriate relief.
(e) If a court enters an order in favor of the adversely
affected person requesting relief under this section, the court
shall award to that person reasonable expenses, including
reasonable attorney's fees.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 153.555. PERMITTED TRANSFER IN CONNECTION WITH
RACETRACK LICENSE. The following transfer relating to a limited
partnership is not a prohibited transfer that violates Section
6.12(a), Texas Racing Act (Article 179e, Vernon's Texas Civil
Statutes):
(1) a transfer by a general partnership of its assets
to a limited partnership, the corporate general partner of which is
controlled by the partners of the general partnership; or
(2) a transfer by a limited partnership of the
beneficial use of or interest in any of its rights, privileges, or
assets to a local development corporation incorporated before
January 31, 1993, under Subchapter D, Chapter 431, Transportation
Code.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
